* Holding bought in 2006 from former Thai PM Thaksin
* Talks on hold due to Thai political unrest
* Second Thai M&A deal to be impacted by stalemate
(Adds motive for sale, details of acquisitions)
By Saeed Azhar and Denny Thomas
SINGAPORE/HONG KONG, Feb 18 Singapore state
investor Temasek Holdings Pvt Ltd is seeking to sell
its $3.1 billion stake in Thai telecom company Shin Corp
, according to people familiar with the matter, and
has approached its SingTel unit as a possible buyer.
Temasek, which owns 41.6 percent of Shin Corp through a
subsidiary, held talks with Singapore Telecommunications Co, as
SingTel is formally known, late last year, said the people, who
declined to be identified as the information is not public.
Those discussions have since stalled amid political tensions in
Thailand, they said.
The Temasek stake in Shin Corp, founded by former Thailand
prime minister Thaksin Shinawatra, is worth $3.1 billion by
current market value. In 2006 Temasek led a group of investors
including Surin Upatkoon, a Chinese-Thai businessman, that
bought 96 percent of Shin Corp for $3.8 billion: Temasek didn't
disclose how much it paid for its holding.
"The strategic buyer in which Temasek has a vested interest
to sell to here is SingTel. So basically it is going to be an
intra-group reorganization," one Hong Kong-based M&A banker
The move by Temasek, which oversees $170 billion, to sell
its ownership in Shin Corp is consistent with other attempts by
the state investor to consolidate some portfolio companies. This
would be Temasek's first attempt to bring part of its telecoms
operations in the region under one roof, analysts said.
However, some of its past consolidation efforts have failed
to bear fruit. Last year its financial services portfolio
company DBS Group Holdings Ltd made a bid for Bank
Danamon Indonesia Tbk, but it failed to get approval
from Indonesian regulator.
The slowdown in Shin Corp deal talks makes it the second
potential transaction in Thailand to be put on the back burner
due to political stalemate. ING Groep's planned sale of
a 31 percent stake in TMB Bank Pcl has also hit
roadblocks, Reuters previously reported.
The 2006 Shin Corp deal triggered accusations of insider
trading and tax evasion as the Shinawatra family and others
involved received $1.9 billion tax-free. Thaksin insisted at the
time that the sale satisfied all the rules in a country where
share sales conducted through the stock market are not taxed.
Protests in Bangkok followed, ultimately leading to a coup
that ousted Thaksin.
Temasek owns 52 percent of SingTel and a successful
acquisition by the latter of the Shin Corp stake would help
SingTel to boost its exposure to a relatively bigger market and
offset sluggish growth in mature economies.
Shin Corp controls the biggest Thai mobile phone operator,
and has interests in several telecommunications businesses,
including Advanced Info Service Pcl, Thailand's
largest mobile phone operator, and satellite firm Thaicom Pcl
. SingTel already owns 23 percent of AIS.
Along with Thai investors, Temasek and Surin Upatkoon bought
the 96 percent Shin Corp holding in 2006 through a vehicle known
as Cedar Holdings Ltd. While Cedar has since sold most of its
ownership, Temasek remains a Shin Corp shareholder through a
subsidiary called Aspen.
A spokesman for Temasek Holdings declined to comment on the
talks. A Shin Corp official in Bangkok declined to comment,
while a SingTel spokeswoman also declined comment.
Shares in SingTel opened flat in Singapore on Tuesday
(Reporting by Saeed Azhar and Denny Thomas; Additional
reporting by Khettiya Jittapong in Bangkok and Rujun Shen in
Singapore; Editing by Michael Flaherty, John Mair and Kenneth